Investors with a reasonably high appetite for risk, in pursuit
of significantly high income levels, would do well to consider high
yield bonds. This category of fixed-income securities generally
represents corporate bonds with low ratings, often below investment
grade. A significant amount of risk is therefore associated with
these investments and mutual funds are the best option to invest in
these instruments. By investing in a well diversified portfolio of
such securities they successfully lower the associated risk for the
investor.
Below we will share with you the 5 highest yielding Zacks #1
ranked high yield mutual funds. Each has earned a
Zacks #1
Rank
(Strong Buy) as we expect these mutual funds to outperform their
peers in the future. To view the Zacks Rank and past performance of
all high yield funds, investors can
click here to see the complete list of funds
.
|
Mutual Fund
|
Sec 30 Day Yield
|
|
Waddell & Reed High-Income A
|
8.52%
|
|
Legg Mason Western Asset High Yield Bond A
|
8.27%
|
|
Northern High Yield Fixed Income
|
8.00%
|
|
Lord Abbett High Yield A
|
7.54%
|
|
Federated High-Income Bond A
|
7.40%
|
Waddell & Reed High-Income A
(
UNHIX
) invests the majority of its assets in a wide range of high yield
debt instruments, the risk associated with which is in consonance
with the fund's objective. The fund purchases fixed-income
securities without regard to their maturity period. This high yield
mutual fund returned 7.68% over the last one year period.
The high yield mutual fund has a minimum initial investment of
$500 and an expense ratio of 1.08% compared to a category average
of 1.16%.
Legg Mason Western Asset High Yield Bond A
(
SAHYX
) invests the majority of its assets in high yield bonds and
related securities. Up to 35% of its assets may also be utilized to
purchase sovereign debt issued by governments from emerging
markets. This high yield mutual fund returned 3.65% over the last
one year period.
Stephen A. Walsh is the fund manager and he has managed this
high yield mutual fund since 2006.
Northern High Yield Fixed Income
(
NHFIX
) invests a large proportion of its assets in corporate bonds rated
below investment-grade and other fixed-income securities. The fund
focuses on purchasing domestic debt securities. This high yield
mutual fund returned 5.79% over the last one year period.
The high yield mutual fund has a minimum initial investment of
$2,500 and an expense ratio of 0.86% compared to a category average
of 1.16%.
Lord Abbett High Yield A
(
LHYAX
) seeks high current income. The fund invests a large share of its
assets in junk bonds, including those issued by companies and
convertible securities. Not more than 20% of its assets are
utilized to purchase foreign securities. This high yield mutual
fund returned 5.94% over the last one year period.
As of March 2012, this high yield mutual fund held 456 issues,
with 0.92% of its total assets invested in Ford Motor Credit Co
12%.
Federated High-Income Bond A
(
FHIIX
) invests heavily in a wide range of junk bonds. These include
domestic and foreign debt securities as well as those issued from
emerging marketsThis high yield mutual fund returned 6.66% over the
last one year period.
Mark E. Durbiano is the fund manager and he has managed this
high yield mutual fund since 1986.
To view the Zacks Rank and past performance of all high yield
mutual funds, investors can
click here to see the complete list of funds
.
About Zacks Mutual Fund Rank
By applying the Zacks Rank to mutual funds, investors can find
funds that not only outpaced the market in the past but are also
expected to outperform going forward. Learn more about the Zacks
Mutual Fund Rank at
http://www.zacks.com/funds
.
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